RESEARCH REPORT

In brief

In brief

  • Business leaders are in the midst of a perfect storm, facing record inflation, cost pressures, global volatility, and labor and material shortages.
  • To navigate these challenges while meeting stakeholder demands and delivering growth, leaders are harnessing cost transformation.
  • Zero-based transformation enables companies to reimagine the business, reset the cost base and invest in new strategic priorities.


Rethink. Reinvent. Transform. As executives maneuver today’s uncertainty, and as new disruptions seem to emerge daily, leaders are no longer focused on simply surviving the storm. They are living these three words to navigate the waters of unprecedented change.

In fact, nearly three-quarters (73%) of C-suite executives surveyed by Accenture have a cost transformation initiative under way or are planning one within six months.

But how can they harness the full potential of that cost transformation? By pointing their compass toward zero. Zero-based transformation looks beyond the present and doesn’t rely on the past to chart the future. Instead, it takes a holistic approach to cost transformation, starting with a clean sheet to:

Rethink cost structures and resource allocation.

Reimagine the business, reset the cost base, and free up funds.

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The value of asset reallocation and freed funds? They can be used to invest in the strategic priorities that drive growth and to develop new capabilities that build resilience and agility for the future.

Going from zero to a hundred

Zero-based transformation is not a budgeting exercise. It’s about deeply understanding costs across the business and aligning to the priorities that will create value. To succeed, it must be an integral part of the organization’s design, driven by technology, integrating sustainability and empowering talent.

Technology

Advanced analytics and other technologies are critical to monitoring and recalibrating costs in real time.

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61%

of leaders are investing in technology including AI, digital tools and cybersecurity to optimize operations.

Sustainability

Looking at the cost base through an ESG (environmental, social, and governance) lens helps companies balance cost and sustainability.

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92%

state that cost transformations need to account for their impact on sustainability and responsible business.

Talent

Change requires employees—and leaders—who are engaged, and a culture that supports the change over the long term.

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88%

cited strategy and leadership as an obstacle, and 60% identified employee engagement as an issue in past cost transformations.



Resetting for growth

Transformations of the past—and their failures—can stay in the past. Today, cost transformations themselves are transforming, starting at zero. What are the keys to success? In our experience, there are four:

Gain forensic visibility with advanced analytics.

Invest in the technologies that will help you course correct.

Start at zero to redesign for growth, resilience.

Look at costs holistically and align resources with new business priorities and capabilities.

Bring everyone along for the journey.

Align transformation messaging and priorities to engage all stakeholders.

Make the transformation count.

Embed new ways of working to ensure benefits endure.

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Leaders are thinking about today’s cost transformation in terms of growth, resilience and competitiveness. As they face today’s disruption and volatility,a zero-based approach can help leaders rethink their business to move beyond cutting costs—and set a course toward a cost transformation that breathes new life into their future.

Learn more about zero-based transformation’s role in funding new strategic priorities—read the full report here.

About the Authors

Robert Willems

Senior Managing Director – Accenture Strategy, Zero-Based Transformation Global Lead


Manish Chandra

Managing Director – Accenture Strategy, Zero-Based Transformation Lead, Growth Markets


Benigno Herreria

Managing Director – Accenture Strategy, Senior Zero-Based Transformation Lead


Praveen Kishorepuria

Managing Director – Accenture Strategy, Zero-Based Transformation North America Lead


Karin Larsson

Managing Director – Strategy & Consulting, Supply Chain & Operations, Zero Based Spend Global Lead


Rob Rubin

Managing Director, Accenture Strategy, Zero-Based Organization Global Lead

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